(This is a wrap-up of the key money moving discussions on CNBC’s “Worldwide Exchange” exclusive for Pro subscribers. Worldwide Exchange airs at 5 a.m. ET each day.) As we end the third quarter, investors and analysts are eyeing the best opportunities for the next three months. Small caps that have outperformed this quarter is one play. Tech analyst Dan Ives from Wedbush also has a bold and bullish call on that sector. Worldwide Exchange Word of the Day: Trend Keith Lerner at Truist says the global markets are in a broad secular uptrend with central bank actions and Chinese government stimulus as key catalysts. “There is an old saying on Wall Street ‘don’t fight the trend’ and ‘don’t fight the Fed,'” Lerner said on Worldwide Exchange. He added: “Global markets are all making 52-week highs over the last week or so… and now we have don’t fight the Fed, China and the European Central Bank as well.” Bullish on Small Caps Nancy Prial of Essex Investment Management is looking for more upside from small caps in the fourth quarter, following the small-cap benchmark Russell 2000 Index outperforming the other indices and rising more than 8.5% in Q3. ‘What we have needed to get the small caps moving are not only rate cuts, but confidence we will be able to navigate a soft landing rather than a recession,” said Prial on Worldwide Exchange. She added: “Most importantly, relative earnings growth… for the small cap sector it’s expanding and the expectation is by the end of the year, small caps will be growing faster than large caps.” Prial said she expects small caps to post better earnings growth than current LSEG estimates for the S & P 500 of 13% growth in Q4 and 15% growth in 2025. Dan Ives and tech in Q4 Dan Ives of Wedbush is forecasting tech will gain another 10% or more in the fourth quarter and more than 20% in 2025. Ives said: “Enterprises are starting to line up for the AI revolution. Now we will start to see the software use cases. That’s where Palantir is front and center, you look at Oracle, Saleforce.com, Service Now… that tidal wave of spend is coming to the shores of tech over the next 2-3 years.” He added he expects popular ETFs for Software and Cybersecurity the IGV and CIBR to gain 5% in Q4. Oil and the Middle East Helima Croft of RBC Capital Markets continues to emphasize that the risk of a broader conflict in the Middle east is not priced into the oil market. In Q3, WTI has fallen more than 16% and Brent Crude more than 17% . Croft says the likelihood of escalation between Israel and Iran either directly or through proxies in Lebanon or Yemen, following the killing of Hezbollah leader Hassan Nasrallah is not reflected in the price action. “The question we really have to look at right now, did the strike on Hassan Nasrallah on a senior Hezbollah operative and Iranian forces as well, they were operating our of Lebanon, is that a trigger for potential Iranian intervention in this war,” said Croft. “The Iranians have talked a big game but we have not seen them yet deploy their military capabilities in support of their most important proxy Hezbollah.” Worldwide Exchange Pick: FedEx and transports Prial is seeing opportunities in two small cap stocks tied to nearshoring and the Infrastructure Investment and Jobs Act, that benefitted from rate cuts in Q3: Clean Harbors (CLH) and Arcosa (ACA) . “We expect that these companies will benefit from the bills that have already been passed where that money is just starting to get deployed.” Prial said on Worldwide Exchange. She added: “In the case of Arcosa, it’s a picks-and-shovels play on the build out of the power sector which is so incredibly important for the build out of AI, the digitization of the country and factory automation and other uses of big data.
